The Halifax House Price Index for July found British house prices fell 1.7% in the month and were down 8.8% from a year ago. British house prices are now down 11.1% from their August 2007 peak, while the REINZ median New Zealand house price was down 3.4% in June from its November 2007 peak. Barfoot and Thompson figures for Auckland out this week for July show its average house price was down 11.1% from its peak in December last year. The Case Shiller Index of house prices in the 20 biggest housing markets in the United States shows that house prices were down 18.4% in May from their peak in July 2006. Signs have emerged in recent weeks that Australian house prices have also started falling.
Speaking about the British house price figures, Halifax economist Suren Thiru said: "Pressure on householders' income, together with a very significant reduction in mortgage finance due to the global financial markets crisis, is constraining potential house buyers' ability to enter the market." Our view is that New Zealand house prices will fall 30% on average over the two years from their peak in November 2007 and will take at least another decade to recover to that November 2007 level. What's your view? Will New Zealand house prices fall as much as in Britain or the United States?